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Turnaround in demand for skilled labour, says HIA

30 October, 2013

The demand for skilled labour in Australia's residential construction industry increased in the September 2013 quarter, said the Housing Industry Association, the voice of Australia's residential building industry.

The HIA Trades Report, a quarterly survey of builders and sub-contractors, shows that the availability of skilled trades fell moderately during the September 2013 quarter, indicating an improvement in labour demand. Trade price developments were again benign with growth still slower than the rate of general inflation.

Commenting on the latest HIA Trades Report, chief economist Dr Harley Dale said: "The availability of residential skilled labour has now been in surplus for ten consecutive quarters, but appears to have passed its peak.

"More recently we have seen a first round new home building recovery taking hold and conditions have improved for a revival in renovations activity from a ten year low," remarked Dale.

"A moderate improvement in demand for skilled labour in the latest Trades Report update is consistent with this environment for residential building and we should see further improvements in labour demand in coming quarters," he said.

"The key will be to ensure adequate policy focus and investment in skills and training. Otherwise a structural shortage of skilled labour will hinder residential building activity, as was the case prior to the GFC."

The HIA Trade Availability Index declined to +0.18 in the September 2013 quarter from a record high +0.24 in the June quarter. Any pressures evident in the HIA Trade Prices Index were generally still muted. The Trade Prices Index increased by 1.7 per cent over the year to the September 2013 quarter, lower than the current inflation rate.

"If what we are seeing now is the tentative beginnings of a residential building recovery, then we can expect to see some further modest declines in the availability of trades," said HIA executive director, industry workforce development, Liz Greenwood.

"The challenge will be to ensure that this doesn't turn into a chronic shortage while we wait for adequately skilled labour to enter into the workforce."

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